While Wall Street passes the graveyard whistling “consumer inflation has peaked,” the producer price inflation washing over American small and medium businesses (SMEs) has not, and is beginning to force them to lay off employees and/or reduce hours. Several late August surveys showed, for example, that 40% of SMEs were unable to pay their building rents in full in August. That is reported by a survey firm called Alignable, and it is equal to the proportion unable to pay rent in March 2021, when the pandemic had closed a third of all SMEs and the rest could have rent forbearance, PPP loans, etc. because their customers had disappeared. Some 45% of the roughly 7,500 firms surveyed said they’re now paying at least half again as much rent as in early 2020; one quarter of them say rent has doubled or tripled since that time.
Just under half of the SMEs in Alignable’s August survey said inflation and lower sales may put them out of business within the next six months. https://www.alignable.com/forum/august-rent-delinquency-breaks-2022-record-up-6 Wait until Fed chair Jerome Powell and his worthless institution serve them some more “pain” by driving their borrowing costs up further. Fed chair Paul Volcker put several million of them out of business that way in his 1980s “double-dip” recession.
